Post-Complan, Kraft Heinz plans new growth boosters
Kraft Heinz sold off its consumer brands business in India to Ahmedabad-based Zydus Wellness and its parent Cadila Healthcare in October. Without the muscle of brands like Complan, Nycil, Glucon-D and Sampriti Ghee, the only significant brand in its India portfolio is Heinz Ketchup. But this scenario may soon change as the company is planning to bring some of its global brands into India in the coming months according to its India Managing Director Sankalp Potbhare. It is also looking for a local distribution partner. Kraft Heinz is the fifth largest food and beverage company globally with 200 brands in its portfolio including Capri Sun Juices, Maxwell House Coffee and Jell-O cake mixes and desserts.
Kraft Heinz gets hungry | dkoding | dkodingnewsline
Bernardo Hees, Global CEO, Kraft Heinz Co had admitted earlier that the value received by the company from the sale of its consumer brands business in India was higher than what the company would have got from doing the business.
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Compensation approved for victims of J&J’s faulty hip implants
A government panel of experts has approved a compensation formula for Indian patients who are suffering due to faulty hip implants sold by healthcare multinational Johnson & Johnson Ltd. This could be the first ever incidence of compensation for sub-standard treatment in the country. According to the formula approved, the patients will get up to Rs 1.2 crore each and an additional Rs 10 lakh for ‘non-pecuniary’ losses.
J&J | dkoding | dkodingnewsline
The minimum amount of compensation for disability will be around Rs 30 lakh. This formula takes into account percentage of disability, age and risk factors. For instance in cases where disability is high (50%) and the age is 20, the compensation will go beyond Rs 1.2 crore. For 60 years and above with low disability (20%) the compensation will be Rs 30 lakh. When sued in the US, J&J had paid US$ 2.5 billion to around 8,000 US citizens. The company came under heavy criticism for not compensating patients in India. J&J had recalled these implants from India in 2010, when a British study revealed that the models had high failure rates, with a high chance that revision surgery would be required for replacement.
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Flying remains stressful, for airlines!
The balance sheets of Indian airlines remain under stress, and they need an equity infusion of around Rs 35,000 crore to bring down their debt burden in the coming 3–4 years, according to rating agency ICRA.
Kinjal Shah | dkoding | dkodingnewsline
Kinjal Shah, ICRA’s Vice-President and Co-Head (corporate sector ratings), stated that carriers need to bring down their debt burden through “improvement in operating performance and/or by way of equity infusion”. Operating costs of airlines have ballooned due to higher fuel prices and a weakening rupee, as their expenditure is largely dollar-denominated. Moreover, intense competition makes it difficult to pass on rise in costs to consumers. This was visible in the month of October when passenger load factor dropped after airlines tried to increase prices. Average ATF (air turbine fuel) prices have risen by around 35% yoy during April-November, 2018 whereas the rupee has depreciated by 7.8% vs the dollar on an average basis. Moreover, airlines have also made large aircraft orders, creating overcapacity in the market.
CRISIL Ratings had cautioned in a report earlier in November that Indian airlines’ losses in the current fiscal could be the steepest in a decade. Estimated at Rs 9,300 crore, these would surpass the Rs 7,348 crore shock in FY 2014.
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Amazon vs Flipkart. Who blinked first?
As their respective stakes in India get higher, the Amazon vs Flipkart battle for the honours in India’s e-commerce space is expected to intensify even further in the coming months. For Wal-Mart and its shareholders, it is a ready reckoner on whether the company got it right with its US$ 16 billion acquisition of Flipkart.
amazon |flipkart |dkoding |dkodingnewsline
In the case of Amazon, it means the success or failure of five years of effort and around US$ 4 billion in investments. So where do they stand so far? A report by Barclays on sales for 2017–18 would actually rile Wal-Mart,. It claims that Amazon registered gross sales of US$ 7.5 billion while Flipkart could only manage US$ 6.2 billion in the same year. Flipkart’s estimates have been done by Barclays without its fashion brands Jabong and Myntra. Barclays has partly used Wal-Mart’s public disclosures on Flipkart for its estimates, while Amazon’s data comes from “thousands of pages of local tax filings, (and) commentary from management”.
However, analysts have questioned the methodology used by Barclays. For one, Amazon and Flipkart cannot be compared directly due to different structures, commission rates and sales recognition techniques. Also, Barclays data includes Amazon Pay but does not consider PhonePe, the payments arm of Flipkart. Meanwhile both firms continue to claim their respective supremacy in the market. So ‘who beats whom’ is still anyone’s guess!
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OYO among top five hotel chains in China
Ritesh Agarwal |OYO |dkoding |dkodingnewsline
China has often appeared as a daunting market for Indian companies, but Indian hospitality brand OYO seems to have made a mark in the ‘Middle Kingdom’ within one year of its entry.
The company announced that it has built an inventory of around 1.8 lakh rooms in China and is now among the top five hotel chains in the country. The company had entered China after successfully foraying into Malaysia and Japan, and counts China as a home country with India. It also has 4,000 hotels under franchise, manchise and leased format under its Chinese operations across cities including Hangzhou, Xian, Nanjing, Guangzhou, Chengdu, Shenzhen, Xiamen and Kunming. The company has a team of more than 5,500 employees in China and has set up 6 Oyo Skill Institutes for training. Founder and Group CEO Ritesh Agarwal affirmed that OYO had committed US$ 600 million to China in its last funding round, out of which US$ 300 million will be leveraged for renovation and infrastructure investments. According to him, this will help the company drive the next wave of growth in the country.
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Business quote:
“There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second.”
Jeff Bezos, Founder, Chairman & CEO, Amazon
